| The 2nd and 3rd questions you pose are all about sales. If your company brings in $10M a year, and somebody plans to quit (or has quit), how much will your sales drop (immediately, and over a period of time). That's the answer to how much you can afford to offer them to stay, and that's how much you should offer their replacement. Suppose that says drop by $1M and you can be satisfied that the drop is 100% a consequence of the departed (or soon to depart) developer - that's how much value they bring to the company, and by the logic of capitalism (which I don't play by, btw), you should pay them some amount less than that. The problem is: you can't determine the value before they quit, and you can't be sure that their replacement will provide that value after they are hired. Look, I understand that in an organization of any size, there are likely to be slackers that feel like a deadweight, and others who feel like the contribute far more than the average. The question is: does tying salary to this perception actually bring the benefits you think it does (which are intimately connected to the notion of incentive) ? There's some good evidence that for developers and other "head-based" employees, it does not, and that flat pay scales create an environment in which you get different kinds of benefits. I've worked exclusively in a distributed FLOSS project for the last quarter century, so in many respects, I'm not well positioned to talk about what happens inside traditional corporations. |